Let’s imagine for a moment that you have one zillion dollars. You walk into a reputable establishment, and you’re offered double-or-nothing on a wager involving a 10-sided die. If it lands between 1-4 inclusive, you lose. If it lands between 5-10 inclusive, you win. But you have to wager your entire zillion dollars. Do you play?
At one level of cold, cold logic, the answer is “Hell, yes.” You’ve got a 60-percent chance to double your money. But think about it for a second: You’ve got one zillion dollars already. You can do pretty much whatever you want with that money. However, if you lose it all on this one shot, you’re back to looking for work as a sandwich artist.
So it is with poker. When you’re playing for points here at SBR, or for that sweet, sweet cash available online or live, you should be very happy to get your stack in on a 60-40 flip. But not if your stack represents your entire bankroll. Then what are you going to do if you lose? Watch Rounders again? That movie is not aging well.
How to Be a Zillionaire
Since so many of us are also involved in sports betting, we’ve already learned some of the basic tenets of bankroll management. At least, we should have by now. The “one-percent” rule of thumb for beginners: Don’t bet your entire, say, $500 roll on one game. Instead, make 100 different bets of $5 each. If you’re good at betting on sports, you’ll be winning about 55 percent of the time, so spreading your bets out will help you keep your bankroll growing incrementally.
You can, and should, do the same thing with poker. No matter how good you are at the game, the results are not in your control. Even if you run KsKc into Kd2s, you’re going to lose about five percent of the time. Five percent! Rich people in suspenders and power ties will kill their grandmothers to get five percent annually on their investments. Why risk your whole bankroll instantly on that same margin? Take your $500 and go play 4NL for a while. When you get to $1000, maybe give 10NL a try. If you fall to $200, play 2NL.
This concept becomes even more important with tournament poker. You have to survive a long series of flips to get paid anything, which means you can count on busting out roughly 80-85 percent of the time even if you’re brilliant at poker. So if you have 1000 points in your SBR account, consider playing only in the tournaments that cost you 10 points to buy in. Save that big 100-point tournament for when you can better afford to lose 100 points.
Chairman of the Bored
“But playing for tiny amounts is boring.” Okay, we’ve already identified the problem. The more emotional you get over money, the poorer decisions you will make. That includes the entire spectrum of emotions, from being bored at the microstakes to getting way too overexcited at the nosebleeds. You can’t just turn off your emotions, either – they’re hardwired in you for a reason. It takes practice to be cool under pressure (or lack thereof) and make the best decisions you can. A lifetime of practice.
It’s ultimately up to you how expensive you want this training to be, and what you get out of it in the end. If you’re enjoying poker and getting good at it, you can take bankroll management to the next level and learn about things like the Sharpe ratio and the Kelly criterion. Meanwhile, as the old saying goes, don’t put all your eggs in one basket. Unless you really like basket tempura.